Attracting, developing and retaining the most talented staff members is a major business investment
Moving from the economic doldrums into a sustained recovery, as the UK, United States and other major Western economies seem to be doing, is good news, but that doesn’t mean it’s plain sailing from here on in.
One of the most pressing challenges for businesses in this “post-post-crash environment”, as you might call it, is the battle for talent. As companies scramble over one another to get the best people on board and make the most of more favourable conditions, it’s only going to intensify. In a survey by LinkedIn, “competition” was the single biggest obstacle to attracting talent for 53 per cent of companies in 2014. That score was up from 38 per cent, just two years earlier, when competition was considered less of a hurdle than compensation.
But there’s another layer of complexity to consider. A growing proportion of the workers that make up the talent pool are millennials, also known as Generation Y. In fact, there’s not even widespread agreement on who they are, let alone what to call them. Some definitions include anyone born between 1980 and 1995, while others would say that the first millennial was born in 1983.
What’s beyond doubt, however, is that this roughly defined group is increasingly important; 2015 has been heralded by some as the year they will account for more than 50 per cent of the workforce for the first time. Deloitte, the accountancy firm, projects that in just ten years that figure will be up to 75 per cent.
What’s also agreed upon is that millennials behave in a different way. What they want from their employer, their job and how they find that job is markedly different from Generation X or the Baby Boomers before them.
For a start, millennials are more likely to move jobs. A CEB survey found that 51 per cent of millennials are looking for external job opportunities, compared with 37 per cent of GenXers and 18 per cent of Baby Boomers. And, according to jobs platform Jobvite, some 45 per cent of employees would move to another job, even if they were happy with their current employment.
For a start, millennials are more likely to move jobs
Unsurprisingly, modern technology is exerting a growing influence. Job-seekers can now use their smartphones to search for new roles wherever and whenever they like (18 per cent even do it in the loo), and a survey by LinkedIn found that social professional networks were ranked by 46 per cent of US organisations as one of the most important sources of “quality hires” last year, making it the top source of such hires overall. That shows a marked increase in importance; in 2011, just 29 per cent of organisations named it among the most important source of such hires, when it was ranked below internet job boards, employee referral programmes and company career websites.
This is something that businesses hoping to attract the right talent have to take into account. But there’s also evidence to suggest that companies’ ability to control directly their image on social media, such as Twitter and Facebook, and social professional networks, such as LinkedIn and Glassdoor, is limited.
The CEB survey found that 60 per cent of applicants said they were more sceptical about what employers say of themselves than they were three years ago. In any case, the typical job-seeker only relies on the employer for 20 per cent of information when looking to apply for roles and a mere 29 per cent actually trust the information they receive through social channels.
Stephen Duncan, lead employee engagement consultant at Radley Yeldar, says this is just something that companies must come to terms with. “In the past, you might have been able to hide the truth about your employee experience from prospective recruits. But the prevalence of social media and forums such as Glassdoor.com mean this is impossible now. Millions spent on slick recruitment advertising can be undermined by a few tweets or bad reviews.”
Joe Wiggins, of Glassdoor, agrees. “Candidates are checking out businesses and doing their own due diligence online to get the inside story,” he says. “And the truth comes out quickly.”
Because Glassdoor allows current employees to leave anonymous reviews of their company and provide other information, Mr Wiggins describes it as “a TripAdvisor for jobs”. And, he adds, its popularity has a few different consequences.
The most obvious is perhaps increased transparency; employers have nowhere to hide and have to think more carefully about how they operate. On the face of it, this shifts the balance of power towards individual job-seekers but, Mr Wiggins argues, it has positive consequences for companies too.
One is that they can limit the number of applicants for a given role or, more specifically, discourage the wrong type of person from applying and only encourage the right ones. Increasing the quality of applicants means a decreased cost per applicant and per hire. Mr Wiggins points to Glassdoor’s work with Groupon, where candidates “self-qualified” themselves for the role on Glassdoor before applying. This both doubled the number of quality applicants and reduced the cost per applicant to £9.
Employers have nowhere to hide and have to think more carefully about how they operate
But, of course, no business wants to discourage good applicants or incur reputational damage caused by bad reviews. Mr Wiggins says that when businesses do receive unflattering comments from employees, the best approach is to take it seriously. He names Virgin Money as an example of a company whose chief executive takes the time to reply personally to negative comments.
In the longer term, employers have to think carefully about the way they come across and how online comments from their own employees affect their “employer brand”. According to Dominic Irvine, founding partner of leadership and performance consultancy Epiphanies, businesses that take this seriously are likely to find themselves reaping the benefits. “Your strategy is what you do – not what you say you do,” he says. “Strong brands are clear what they stand for as well as what they don’t. For a business, the brand touchpoints are almost endless – the e-mails you send, the dress code you require, the information on the notice boards – all these things spell out to employees the essence of your brand.
“If you want a strong brand, have clear values, expect people to operate by those values and ensure the culture of the business is a reflection of what you stand for. If you do those things, then your employees will do all the branding work you need done.”
LinkedIn’s Richard George says: “Smart people know smart people. And your current employees can open doors to great hires as their connections see what is going on in your organisation.” Millennials have different priorities and expectations of their employers. “Millennials want to work somewhere they will feel proud to call their employer, and shared values can be as important as salary and career prospects,” says Mr George.
Indeed, a Capstrat survey found that 72 per cent of millennials would sacrifice a higher salary for a more personally and professionally fulfilling career. Recognition, flexibility and healthy corporate values are among the things that regularly crop up in surveys of millennials’ work-life priorities.
The bad news is, in this age of increased transparency, there’s no superficial quick fix to create an organisation with a reputation for being a good place for millennials to work. The good news: companies that hit the right note can expect word to travel fast.